India: Dispute Resolution & Arbitration Monthly Update | December 2021

Jacob Punnen & Anr v. United India Insurance Co Ltd

Civil Appeal No. 6778 of 2013

Background facts

• In 1982, Mr. Jacob Punnen & his wife (Appellants), both senior citizens, availed a medical insurance policy (referred as Mediclaim), from United India Insurance Co Ltd (the Insurer), which was renewed annually. Thereafter, the existing insurance policy was renewed by the Appellants for the period of 2008-2009 with a coverage of INR 8 lakh. However, at the time of renewal, the Insurer failed to disclose that the terms of the new policy would be different from those of the earlier, lapsed policy. In 2008, the 2^nd Appellant had to undergo angioplasty surgery and a claim of INR 3.82 lakh was submitted by her to the Insurer. However, the Insurer partially accepted the claim by paying only INR 2 lakh to the Appellants. It was the case of the Insurer that the renewed policy had a new clause which limited the liability with respect to surgeries like angioplasty to an overall limit of INR 2 lakh.
• Aggrieved by this, the Appellants filed a complaint before the District Consumer Disputes Redressal Forum (District Forum). Subsequently, the District Forum directed the Insurer to pay the balance amount and also awarded compensation to the Appellants.
• Discontented by this, the Insurer challenged the said order in the State Consumer Disputes Redressal Commission. Accordingly, the State Commission reversed the order of the District Forum by holding that the terms of the policy were known to the Appellants and, therefore, they were bound by it.
• Unsatisfied with this, the Appellants approached the National Consumer Disputes Redressal Commission (NCDRC) with a Revision Petition wherein the findings of the State commissions were upheld. The Appellants then filed an appeal in the Hon'ble Supreme Court of India to challenge the order of the NCDRC.

Issue at hand?

• Whether the Appellants, as beneficiaries of the policy, could complain about mistake in its terms, and the possible consequences of such mistake?

Decision of the Court

• At the outset, the Supreme Court focused upon the 'administrative guidelines' of the Insurer for renewal of the existing policy and expressed that there was no consensus ad idem on the introduction of the cap on the coverage by the Insurer because the new term was introduced unilaterally about which the Appellants were uninformed. The Supreme Court applied the general law of avoidance of contract to the facts of the case by referring to Canara Bank v. United India Insurance Co Ltd¹ and Tarsem Singh v. Sukhminder Singh² and held that the Appellants could insist on the old insurance policy, on the ground that it renewed the preexisting policy.
• The Supreme Court also placed reliance on United India Insurance Co Ltd v. MKJ Corp³ and Modern Insulators Ltd v Oriental Insurance Co Ltd⁴ wherein the importance of principle of uberrima fide (duty of utmost good faith) and its application to the Insurer was highlighted in the following terms: 'It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from nondisclosure of the facts which the parties know'. The Court also reiterated the principles laid down by it in Pioneer Urban Land & Infrastructure Ltd v Govindan Raghavan⁵, to underline those unfair terms in a contract cannot be enforced, in case of absence of free choice on the part of a consumer.
• The Supreme Court further pointed that in the present case, the Standard Form Contract, renewed year after year, left the Appellants only with the choice of raising the insurance cover. The details with respect to the increased coverage, which could have resulted in the higher individual limits (for surgical procedures) from the Appellants, were denied to them, and the Court held that withholding such information was a crucial omission on part of the Insurer.
• The Court summarized the principles with respect to the role of insurance agents and the liability of insurance companies in the event of failure to discharge the duties cast upon agents, and the likely vicarious liability of the insurer, by placing confidence in Delhi Electric Supply Undertaking v. Basanti Devi⁶ and the Clauses 3 (2) & 4 (1) of the notification⁷ issued by the Insurance Regulatory and Development Authority.
• The Court also perused the definition of 'deficiency' in service under the Consumer Protection Act, 1986 and deduced that an unjustifiable non-disclosure about a change in the policy by the Insurer would amount to 'deficiency in service' within the purview of the Act.
• In this backdrop, the Hon'ble Supreme Court allowed the Appeal and granted the medical relief to the Appellants.

Attorney General for India v. Satish & Anr

Special Leave Petition (Crl) Nos. 925, 1339, 1159, 5071 and 7472 of 2021

Background facts

• Four appeals with the lead case of the accused, Satish, were filed before the Supreme Court. The facts of the case of accused are summarized as below:
  • On December 14, 2016, the victim aged 12 years had gone out to bring guavas. However, when the victim did not return back for a long time, mother of the victim (Informant) searched for her and was informed by one neighbor that Satish (Accused) had taken her with him to his house.
  • Thereafter, the Informant went to the house of the Accused and was told by the Accused that the victim was not in his house. However, the Informant barged into the house of the Accused as she could hear the shouts and cries of the victim in the room.
  • Upon making inquiry as to what had happened, the victim stated to the Informant that the Accused had asked her to come with him and told her that he would give her a guava. The victim further told the Informant that the Accused took her to his house, then pressed her breast and tried to remove her salwar. To which, the victim tried to shout but the Accused pressed her mouth.
  • Accordingly, the Informant lodged a complaint at the police station of Gittikhadan, Nagpur.
  • Thereafter, investigation was conducted and upon its completion, the charge sheet was filed in the Special Court, Nagpur against the Accused.
  • The Extra Joint Additional Sessions Judge, Nagpur (Special Court) vide the Judgment and Order dated February 5, 2020, convicted, and sentenced the Accused for the offences punishable under Sections 342, 354 and 363 of the Indian Penal Code (IPC) and Section 8 of the Protection of Children from Sexual Offences Act, 2012 (POCSO Act).
  • Aggrieved by the decision of Special Court, the Accused preferred an Appeal before the Bombay High Court, Nagpur Bench (HC). The HC vide Judgment and Order dated January 19, 2021, disposed of the said Appeal by acquitting the accused for the offence under Section 8 of the POCSO Act on the ground that the act of the Accused would not fall in the definition of 'sexual contact' and there is no direct physical contact i.e., skin to skin contact with sexual intent without penetration. The HC instead convicted the Accused for the minor offence under Sections 342 and 354 of the IPC (Impugned Order).
  • Aggrieved by the Impugned Order, the Attorney General for India, the National Commission for Women, the State of Maharashtra and the Accused filed appeals before the Hon'ble Supreme Court (SC).

Issues at hand?

• Whether skin to skin contact is necessary for the offence of sexual assault under the POCSO Act?
• Whether the interpretation of Section 7 of the POCSO Act as laid down by Bombay High Court is valid?

Decision of the Court

• Upon perusal of the Impugned Order and the arguments advanced by the parties, the SC perused the relevant provisions of the POCSO Act and observed that the courts have a duty to accept an interpretation or construction which promotes the object of the legislation and prevents its possible abuse.
• The SC noted that the restrictions in the interpretation of the words, 'touch' or 'physical contact' to 'skin to skin contact' contained in Section 7 of the POCSO Act, would lead to an absurd interpretation of the said provision. Thus, the SC used the dictionary to interpret Section 7 of the POCSO Act, concluding that the word 'touch' has been used to refer to special parts of the body, whereas the term 'physical contact' has been used to refer to any other act. As a result, touching the sexual part of the body with 'sexual intent' would constitute sexual assault under Section 7 of the POCSO Act. The sexual intent, not the child's skin-to-skin contact, is the most essential factor and the sexual intent is a matter of fact that must be determined based on the surrounding circumstances.
• The SC further noted that the prosecution was not required to prove a 'skin to skin' contact to prove the charge of sexual assault under Section 7 of the POCSO Act and that the HC had committed an error in holding that there was no offence since there was no direct physical contact i.e., 'skin to skin' with sexual intent.
• According to Section 30 of the POSCO Act, the courts are entitled to raise the presumption about the mental state of the accused; since it had not been rebutted by the accused, the allegation of sexual intent stood proved by the prosecution.
• After careful examination of the facts and provisions, the SC held that the acts committed by Accused were the acts of sexual assault contemplated under section 7 and therefore liable to be punished under Section 8 of the POCSO Act.
• In view of the above, the SC quashed and set aside the orders and judgments passed by the HC and convicted Satish for the offences punishable under Section 8 of the POCSO Act and under Sections 342, 354 and 363 of the IPC with rigorous imprisonment for a period of 3 years and fine of INR 500.

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Footnotes

1. (2020) 3 SCC 455

2. (2020) 3 SCC 455

3. 1996 (6) SCC 428

4. 2000 (2) SCC 734

5. 2019 (5) SCC 525

6. (1999) 8 SCC 229

7. Dated 16^th October 2002

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